The Associated Press: “A Hot US Job Market Is Coaxing People in from the Sidelines”

“The pace of hiring in 2018 was the most robust in three years, and for a surprising reason: Many more people have decided to look for work than experts had expected.”

A hot US job market is coaxing people in from the sidelines
By Christopher Rugaber
The Associated Press
March 7, 2019

A surprisingly strong burst of job growth over the past year has led many economists to wonder: Where are all the workers coming from?

As recently as last spring, analysts had worried that hiring would slow as the pool of unemployed shrank. Many employers have complained for years that they could no longer find enough people to fill their open jobs.

Turns out they were both wrong.

The pace of hiring in 2018 was the most robust in three years, and for a surprising reason: Many more people have decided to look for work than experts had expected. The influx of those job seekers, if sustained, could help extend an economic expansion that is already the second-longest on record.

The growth in America’s workforce — made up of people either working or looking for work — has helped reverse an alarming consequence of the recession: The exit of millions of Americans from the job market.

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The proportion of Americans ages 25 to 54 who have a job has reached nearly 80 percent — the same as before the recession. Economists refer to this age group as “prime-age” workers. It excludes older Americans who have retired and younger workers who may be in school.

“The U.S. is a very diverse and dynamic economy and can often surprise us,” said Julia Coronado, chief economist at MacroPolicy Perspectives. “This is a positive surprise. We’re due for one.”

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With so few people unemployed, businesses have increasingly begun recruiting more widely, including among people who hadn’t been looking for work.

“Economists were too quick to discount what the economy was capable of going forward,” said Martha Gimbel, chief economist at the job listings site Indeed. “There continues to be more room to draw people into the labor force and get them a job.”

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Many companies are relaxing their education or experience requirements, according to economists and staffing agencies. They are considering more applicants with disabilities. Businesses are expanding their training programs. Some, analysts say, are also looking with a more open mind at people with criminal backgrounds.

Partly as a result, the number of people who either have a job or are looking for one grew 1.6 percent in 2018, sharply higher than the average annual gain of 0.4 percent in the first five years after the recession.

The rebound has confounded many experts’ projections.

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The proportion of prime-age women in the labor force is now higher than before the recession. And for women ages 25 through 34, participation is at an 18-year peak. The participation rate for prime-age African-American women also exceeds its pre-recession level.

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As they assess a broader pool of job applicants, some companies are doing more to develop skills. Goodwill Industries has experienced soaring demand for its training programs, which seek to turn people with low skills or criminal backgrounds into job-ready applicants. Goodwill teaches such traditional skills as welding as well as so-called soft skills, which include getting along with workers and taking direction.

Jennifer Taylor, a vice president of Career Services at Goodwill of North Georgia, says companies are so hungry for workers that in some cases they hire people before they even finish their training. The Atlanta-based Goodwill placed 24,902 people in jobs last year, Taylor said, three times as many as it did five years ago.

“We are seeing vastly more employers that may not have used Goodwill in the past and that are significantly increasing their hiring on the spot,” Taylor said. “They’re struggling to find talent in the open marketplace.”

A survey by Manpower found that 54 percent of employers invested in training programs in 2018, up from just 20 percent four years earlier. One-third said they’re adjusting their education and experience requirements, with some no longer requiring a college degree.